80792 Federal Register / Vol. 88, No. 222 / Monday, November 20, 2023 / Notices 

29 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 98643 

(September 29, 2023), 88 FR 68843 (‘‘Notice’’). 

4See Notice, supra note 3 at 68842. 

5See id. 

6See id. 

7See Options 3, Section 3, Minimum Increments. 

8See Options 4A, Section 12(c)(1). 

9The Exchange proposes the same expiration 

month options for NDXP as are permitted for the 

Nasdaq–100 Index, since both options classes are 

derived from the Nasdaq–100 Index. 

10See Options 4A, Section 12(b)(1). 

11For a more detailed description of the proposed 

Third Friday NDXP contract, see Notice, supra note 

3. 

12See Notice, supra note 3 at 68842. 

13See Supplementary Material .07(a) to Options 

4, Section 5. 

14See Options 3, Section 6(c) and (d). 

15See Notice, supra note 3 at 68843. 

16The Exchange notes that trading in NDXP will 

ordinarily cease at 4:00 p.m. on the day on which 

the exercise-settlement value is calculated. See 

Notice, supra note 3 at 68843, n. 16. 

17 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

18 15 U.S.C. 78f(b)(5). 

19See Securities Exchange Act Release No. 98450 

(September 20, 2023), 88 FR 66 111 (September 26, 

2023) (SR–ISE–2023–08) (Order Granting Approval 

of a Proposed Rule Change, as Modified by 

Amendment No. 1, to Make Permanent Certain 

P.M.-Settled Pilots) (‘‘ISE Pilot Approval’’). 

20See Notice, supra note 3 at 68843. 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of NSCC 

and on the Depository Trust Company’s 

website (http://dtcc.com/legal/sec-rulefilings.aspx). 

Do not include personal identifiable 

information in submissions; you should 

submit only information that you wish 

to make available publicly. We may 

redact in part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. 

All submissions should refer to File 

Number SR–NSCC–2023–007 and 

should be submitted on or before 

December 11, 2023. Rebuttal comments 

should be submitted by December 26, 

2023. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.29

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25544 Filed 11–17–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98935; File No. SR–ISE– 

2023–20] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Order Approving a Proposed 

Rule Change To Permit the Listing and 

Trading of P.M.-Settled Nasdasq–100 

Index® Options With a Third-Friday-ofthe-Month Expiration 

November 14, 2023. 

I. Introduction 

On September 28, 2023, Nasdaq ISE, 

LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to permit the listing and trading 

of p.m.-settled Nasdaq–100 Index 

options with a third-Friday-of-themonth (‘‘Third Friday’’) expiration. The 

proposed rule change was published for 

comment in the Federal Register on 

October 4, 2023.3 The Commission did 

not receive any comment letters and is 

approving the proposed rule change. 

II. Description of the Proposal 

ISE proposes to amend its rules to 

permit the listing and trading of p.m.- 

settled Nasdaq–100 Index (‘‘NDXP’’) 

options with a Third Friday expiration. 

The Exchange currently can list a.m.- 

settled Third Friday expirations on 

Nasdaq–100 Index (‘‘NDX’’) options.4

With this proposal, the Exchange would 

have Third Friday expirations on NDX 

options that are both a.m.-settled and 

p.m.-settled on the same day.5 The 

Exchange states that the conditions for 

listing options on NDXP with Third 

Friday expirations will be similar to the 

a.m.-settled NDX Third Friday 

expirations.6 The Exchange proposes to 

amend Options 4A, Section 12(a)(6) to 

provide that in addition to a.m.-settled 

Nasdaq–100 Index options approved for 

trading on the Exchange, the Exchange 

may also list options on the Nasdaq–100 

Index whose exercise settlement value 

is the closing value of the Nasdaq–100 

Index on the expiration day. 

The proposed contract would use a 

$100 multiplier, and the minimum 

trading increment would be $0.05 for 

options trading below $3.00 and $0.10 

for all other series.7 Strike price 

intervals would be set at no less than 

$2.50.8 Consistent with existing rules 

for index options, the Exchange would 

allow up to nine near-term expiration 

months 9 as well as LEAPS.10 The 

product would have European-style 

exercise. Because the product is based 

on NDX, there would be no position 

limits.11

NDXP options are series of the NDX 

options class.12 Currently, these NDXP 

options may expire any day of the week: 

Mondays, Tuesdays, Wednesdays, 

Thursdays, Fridays, as applicable (other 

than third-Friday-of-the-month), and the 

last trading day of the month.13 Third 

Friday p.m.-settled options trading 

under the NDXP symbol will be a new 

type of series under the Nasdaq–100 

Index options class and not a new 

options class—therefore all ThirdFriday NDXP options will be aggregated 

together with all other standard 

expirations for applicable reporting and 

other requirements.14

As with NDX, whenever the Exchange 

determines that additional margin is 

warranted in light of the risks associated 

with an under-hedged NDXP option 

position, including Third Friday NDXP, 

the Exchange may consider imposing 

additional margin upon the account 

maintaining such under-hedged 

position pursuant to its authority 

pursuant to Exchange Rules Options 6E, 

Section 2.15 The trading hours for 

NDXP, including Third Friday NDXP, 

will be from 9:30 a.m. to 4:15 p.m. 

Eastern Time.16

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.17 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,18 which 

requires, among other things, that the 

Exchange’s rules be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

In support of its proposal, the 

Exchange notes that the Commission 

recently approved trading of Third 

Friday expirations for options based on 

1⁄5 the value of the Nasdaq–100 Index 

(‘‘NQX’’).19 The Exchange states that the 

introduction of Third Friday NDXP will 

attract order flow to the Exchange, 

increase the variety of listed options to 

investors, and provide a valuable hedge 

tool to investors.20 The Exchange 


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Federal Register / Vol. 88, No. 222 / Monday, November 20, 2023 / Notices 80793 

21See id. 

22See id. 

23See id. 

24See id. 

25See Securities Exchange Act Release No. 65256 

(September 2, 2011), 76 FR 55969, at 55972 

(September 9, 2011) (SR–C2–2011–008) (Order 

approving proposed rule change to establish a pilot 

program to list and trade SPXPM options on the C2 

Options Exchange, Incorporated). 

26See e.g., ISE Pilot Approval; Securities 

Exchange Act Release Nos. 98451 (September 20, 

2023), 88 FR 66088 (September 26, 2023) (SR–Phlx– 

203–07) (Order approving a nonstandard 

expirations pilot program and p.m.-settled XND 

options) and 98454 (September 20, 2023), 88 FR 

66103 at 66103–04 (September 26, 2023) (SR– 

CBOE–2023–005)(Order approving p.m.-settled 

Third Friday SPX options). 

27See e.g., ISE Pilot Approval, 88 FR at 66114. 

28See id. 

29See supra note 19. In addition, the Commission 

previously approved a pilot program permitting the 

listing and trading of Third Friday NDX options on 

Nasdaq PHLX LLC (‘‘Phlx’’). See Securities 

Exchange Act Release No. 81293 (August 2, 2017), 

82 FR 37138 (August 8, 2017) (approving SR–Phlx– 

2017–04). Phlx did not list any options under the 

program and subsequently removed the rule from 

its rule book. See Securities Exchange Act Release 

No. 87517 (November 13, 2019), 84 FR 63910 

(November 19, 2019) (SR–Phlx–2019–49). 

30See supra note 24 and accompanying text. 

31 15 U.S.C. 78f(b)(5). 

32 15 U.S.C. 78s(b)(2). 

33 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release Nos. 98148 

(August 16, 2023), 88 FR 57150 (SR–NYSE–2023– 

29); 98149 (August 16, 2023), 88 FR 57154 (SR– 

NYSEAMER–2023–39); 98150 (August 16, 2023), 88 

FR 57142 (SR–NYSEArca–2023–53); 98151 (August 

16, 2023), 88 FR 57159 (SR–NYSECHX–2023–16). 4See Securities Exchange Act Release No. 98171 

(August 21, 2023), 88 FR 58364 (SR–NYSENAT– 

2023–18). Each proposal is referred to as the 

‘‘Notice’’ and for ease of reference, page citations 

are to the Notice for NYSE–2023–29. 5Notice, supra note 3, at 57150. For purposes of 

each Exchange’s colocation services, a ‘‘User’’ 

Continued 

further believes that listing Third Friday 

NDXP would not have any adverse 

effects or impact on market volatility 

and the operation of fair and orderly 

markets on the underlying cash market 

at or near the close of trading in its 

Nasdaq–100 Index options.21 Further, 

the Exchange states it does not believe 

that any market disruptions will be 

encountered with the introduction of 

Nasdaq–100 Index options with thirdFriday-of-the-month expiration dates.22

The Exchange states it will monitor for 

any such disruptions or the 

development of any factors that could 

cause such disruptions.23 Finally, the 

Exchange represents it has sufficient 

capacity to handle additional traffic 

associated with listing Third Friday 

NDXP options and that it has in place 

adequate surveillance procedures to 

monitor trading in Third Friday NDXP 

options.24

The Commission has had concerns 

about the adverse effects and impact of 

p.m.- settlement upon market volatility 

and the operation of fair and orderly 

markets on the underlying cash market 

at or near the close of trading on 

expiration days.25 However, the 

Commission recently approved 

proposals from several exchanges, 

including the Exchange, to permanently 

establish programs permitting the listing 

and trading of certain p.m.-settled 

broad-based index options.26 In 

approving these proposals, the 

Commission reviewed data provided by 

the exchanges in their filings, the 

exchanges’ pilot data and reports, as 

well as an analysis conducted at the 

direction of Staff from the Commission’s 

Division of Economic and Risk Analysis 

and concluded that analysis of the pilot 

data did not identify any significant 

economic impact on the underlying 

component securities surrounding the 

close as a result of expiring p.m.-settled 

options nor did it indicate a 

deterioration in market quality for an 

existing product when a new p.m.- 

settled expiration was introduced.27

Further, the Commission stated that 

significant changes in closing 

procedures in the decades since index 

options moved to a.m. settlement may 

also serve to mitigate the potential 

impact of p.m.-settled index options on 

the underlying cash markets.28

As noted above, the Exchange 

currently may trade Third Friday NQX 

options in addition to p.m.-settled NDX 

option with nonstandard expirations.29

The Exchange’s proposal, which would 

permit p.m.-settled Third Friday NDX, 

is reasonably designed as a limited 

expansion of existing p.m.-settled 

broad-based index option programs and 

may provide the investing public and 

other market participants more 

flexibility to closely tailor their 

investment and hedging decisions. The 

Exchange has represented that it has an 

adequate surveillance program in place 

to monitor trading in the Third Friday 

NDXP options and has the necessary 

systems capacity to support the new 

options series.30 The Commission 

expects the Exchange to continue to 

monitor any potential risks from large 

p.m.-settled positions and take 

appropriate action on a timely basis if 

warranted. 

Accordingly, the Commission finds 

that the proposed rule change is 

consistent with Section 6(b)(5) of the 

Act 31 and the rules and regulations 

thereunder applicable to a national 

securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,32 that the 

proposed rule change (SR–ISE–2023–20) 

be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25547 Filed 11–17–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98937; File Nos. SR–NYSE– 

2023–29, SR–NYSEAMER–2023–39, SR– 

NYSEArca–2023–53, SR–NYSECHX–2023– 

16, SR–NYSENAT–2023–18] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; NYSE 

American LLC; NYSEArca, Inc.; NYSE 

Chicago, Inc.; NYSE National, Inc.; 

Order Approving Proposed Rule 

Changes To Establish Certain 

Alternative Procedures for the 

Allocation of Power in Co-Location 

November 14, 2023. 

I. Introduction 

On August 3, 2023, New York Stock 

Exchange LLC, NYSE American LLC, 

NYSEArca, Inc., and NYSE Chicago, Inc. 

(the ‘‘Exchanges’’) each filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposal to amend its 

connectivity fee schedule to include an 

alternative procedure to allocate power 

in the Mahwah Data Center based on 

deposit-guaranteed orders from 

colocation Users in certain 

circumstances. On August 17, 2023, 

NYSE National, Inc., filed with the 

Commission the same proposed 

amendments to its connectivity fee 

schedule. The proposed rule changes 

were published for comment in the 

Federal Register on August 22, 2023 3

and August 25, 2023.4 The Commission 

received no comments on the proposed 

rule changes. This order grants approval 

of the proposed rule changes. 

II. Description of the Proposed Rule 

Changes 

A. Background 

As more fully set forth in the Notice, 

the Exchanges represent that in recent 

years they have experienced 

‘‘unprecedented’’ demand from 

colocation Users for cabinet space and 

power at the Mahwah Data Center 

(‘‘MDC’’).5 The Exchanges filed, and the 


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